Item 1.01 Entry into a Material Definitive Agreement
Vystar owns 58% of the issued and outstanding shares of Rotmans.
PPP Loan. On April 16, 2020, Rotmans received $1,402,900 in loan funding from
the Paycheck Protection Program (the "PPP"), established pursuant to the
recently enacted Coronavirus Aid, Relief, and Economic Security Act (the "CARES
Act") and administered by the U.S. Small Business Administration ("SBA"). The
unsecured loan (the "PPP Loan") was evidenced by a promissory note of the
Company dated April 16, 2020 in the principal amount of $1,402,900 with United
Community Bank. This loan was completely forgiven on January 11th, 2021.
On February 2, 2021, Rotmans received a $1,402,900 in a second round of loan
funding from the PPP established pursuant to the CARES Act and administered by
the SBA. The unsecured loan (the "Second PPP Loan") is evidenced by a promissory
note of the Company (the "Second PPP Note") in the principal amount of
$1,402,900 with United Community Bank. Under the terms of the Second PPP Note
and the Second PPP Loan, interest accrues on the outstanding principal at the
rate of 1.0% per annum. The term of the Second PPP Note is two years, although
it may be payable sooner in connection with an event of default under the Second
PPP Note. To the extent the loan amount is not forgiven under the PPP, Rotmans
is obligated to make equal monthly payments of principal and interest, beginning
seven months from the date of the Second PPP Note, until the maturity date. The
Note may be prepaid in part or in full, at any time, without penalty. The Note
provides for certain customary events of default.
Item 2.03 Creation of a Direct Financial Obligation or an obligation under an
Off-Balance Sheet Arrangement of a Registrant
On October 7, 2020, the Company disclosed that it entered into a $630,000
promissory note for a loan made by the President of the Company, Steven Rotman,
at 5% note payable at maturity no later than July 1, 2021. On February 22nd,
2021, the Company entered into an additional loan with the Mr. Rotman on the
following terms: a $568,000 promissory note for a loan made by the President of
the Company, Steven Rotman, at 5% note payable at maturity no later than
February 22nd, 2022. This brings the total of the two loans to $1,198,000.
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